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cwelsh

Diversified Anchor Fund Launch

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Lorintine Capital is happy to announce that it is launching a new fund based on the Diversified Leveraged Anchor Strategy.  The Fund is being formed as a onshore/offshore master/feeder fund so it can accept both US based and Non-US investors.  We also are actively looking for solicitors to help fund raise (in other words pay the SO members for referrals to investors).

 

If you are interested in investing, or interested in becoming a solicitor, please email me at cwelsh@lorintinecapital.com so we can discuss the opportunity with you directly.  A copy of the Fund’s overview is available upon request.

 

The Fund is in the process of completing the various government paperwork necessary to legally form in both the United States and BVI and finalizing its investor documentation.  Fundraising will start in the near immediate future.  Unfortunately, due to US security laws, US clients must be “qualified clients” and foreign investors must be “professional investors.” 

 

To be a qualified client, the US based investor must either (a) have a net worth (not including their principal residence) of over $2.1m, OR (b) invest at least $1m.

 

To be a professional investor, the non-US based investor must have a net worth of at least $1m US, which may include real estate.

 

And do not worry, the existence of this Fund should not impact the currently offered Anchor services, as there will be some differences between the two.  For instance, the Fund will trade the indexes directly (SPX vs SPY), ladder the hedging positions,  enter more diversified positions, and pool funds. 

 

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12 hours ago, Manish71 said:

@cwelsh @Kim, the "qualified client" requirement is certainly a hurdle in investing in the fund. So I wanted to ask if the Anchor subscription service will kind of mimic the returns of the Anchor hedge fund ? Thanks.

I hate the qualified client rules.  Supposedly they're their to "protect" investors from themselves.  I personally think its a way to limit access to alternative vehicles.  That said, we have to abide by the laws.

 

And as of right now, we have no plans to stop the Anchor service here.  If we get a large institutional investor, there's always the chance they'll require it, but that's not even on the horizon right now.

 

I think your description of "kind of" mimic is the right phrase.  The key differences:

 

1.  The Fund likely will use larger instruments (SPX vs SPY).  As these trade pretty much in line we shouldn't see much difference;

2.  The Fund will ladder positions.  Instead of having one SPY position that you open for this month, we'll have at least two sets of puts and calls, if not four (depending on the size) across various expirations.  This should reduce volatility and increase returns over time and on the average;

3.  The Fund will be able to diversify into more instruments as it grows; and

4.  The Fund's trading costs will be lower (significantly).

 

We EXPECT and hope the Fund will outperform the regular Anchor service due to above reasons.  That said, we also intend on keeping this running and trading the strategy for clients in separately managed accounts where they aren't large enough to join the fund.

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1 minute ago, maronovici said:

Are Canadian customers accepted by this new fund?

Short answer: Yes.

 

Long answer:  The BVI feeder will be able to accept all countries that are not on a US, BVI, or EU blacklist.  The EU blacklist can be found here: https://www.consilium.europa.eu/en/policies/eu-list-of-non-cooperative-jurisdictions/.  The US lists are a bit more dislocated, but can be found here: https://home.treasury.gov/policy-issues/financial-sanctions/sanctions-programs-and-country-information and we also have to run an OFAC check here: https://home.treasury.gov/policy-issues/office-of-foreign-assets-control-sanctions-programs-and-information.

 

You also have to make sure YOU comply with your local laws and tax laws.  Most countries require you to still report income earned from a foreign fund as income.  (In other words, if you invest $1m here and make $100,000 your country probably will want you to pay taxes on that, even if you aren't paying BVI taxes).  Some countries may not.

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If you expressed interest in the Fund, the US-Based investor documents went out yesterday.  If you did not receive them, or would like to, please email me or PM me.

 

The Non-US investor documents will go out next week, as soon as our BVI lawyers get them to me.

 

For those that are interested, there is still time to sign up to invest or become a solicitor.  

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So, I guess I shouldn't be surprised, but the wheels of government and lawyers run slow.  That said, as of TODAY, we're done with everything and are now accepting subscriptions.  Here's what's occurred over the last month:

 

1.  The US Based Feeder (the entity US investors will go into) is up and running, Reg-D notices have been filed with the SEC, bank accounts open, offering documents finalized, etc.  It's been ready for about 3 weeks;

 

2.  We JUST got our GIIN/FACTA compliance numbers back from the IRS today for the offshore entity for the non-US investors.  Basically I had to fill out a bunch of forms and open an account that says this entity does not accept US taxpayers.  The offering documents also just got back from the lawyers in BVI this past Friday.  Up until today, I could not accept outside the US investors.

 

3.  All of our accounts have been approved and opened at Interactive Brokers.

 

In the coming days, I'll be sending out offering updates and documents to all of those who expressed interest in joining.  If I have not talked (or at least emailed with you), and you have interest in investing in the Fund, please email me at cwelsh@lorintinecapital.com.  If you wish to help fund raise (and get paid for it if that's legal where you are, in the US it is, reach out as well.  We have several people signed up as solicitors to assist so far.

 

You can also post questions and the like here, or directly message me through the SO site, but email is typically the fastest.

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